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Economic value added or economic profit is the difference between revenues and costs,where costs include not only expenses, but also cost of capital.

Economic Profit
Net Operating Profit after Taxes (NOPAT)
Cash Operating Taxes
Invested Capital
Cost of Capital
Economic Spread Ratio
Economic Profit Margin

Dell Technologies Inc., economic profit calculation

US$ in millions

12 months ended:	Feb 2, 2024	Feb 3, 2023	Jan 28, 2022	Jan 29, 2021	Jan 31, 2020	Feb 1, 2019
Net operating profit after taxes (NOPAT)¹	2,835)	5,638)	7,874)	7,942)	5,052)	1,396)
Cost of capital²	10.81%	8.57%	9.26%	8.78%	6.81%	7.73%
Invested capital³	53,565)	57,982)	53,988)	83,528)	81,348)	80,442)

Economic profit⁴	(2,955)	670)	2,877)	604)	(492)	(4,820)

Based on: 10-K (reporting date: 2024-02-02), 10-K (reporting date: 2023-02-03), 10-K (reporting date: 2022-01-28), 10-K (reporting date: 2021-01-29), 10-K (reporting date: 2020-01-31), 10-K (reporting date: 2019-02-01).

¹ NOPAT. See details »

² Cost of capital. See details »

³ Invested capital. See details »

⁴ 2024 Calculation
Economic profit = NOPAT – Cost of capital × Invested capital
= 2,835 – 10.81% × 53,565 = -2,955

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Item	Description	The company
Economic profit	Economic profit is a measure of corporate performance computed by taking the spread between the return on invested capital and the cost of capital, and multiplying by the invested capital.	Dell Technologies Inc. economic profit decreased from 2022 to 2023 and from 2023 to 2024.

Dell Technologies Inc., NOPAT calculation

US$ in millions

12 months ended:	Feb 2, 2024	Feb 3, 2023	Jan 28, 2022	Jan 29, 2021	Jan 31, 2020	Feb 1, 2019
Net income (loss) attributable to Dell Technologies Inc.	3,211)	2,442)	5,563)	3,250)	4,616)	(2,310)
Deferred income tax expense (benefit)¹	(91)	(717)	(221)	(399)	(6,339)	(1,331)
Increase (decrease) in allowance for expected credit losses²	(7)	(12)	(9)	10)	9)	(18)
Increase (decrease) in deferred revenue³	(1,141)	2,713)	1,981)	3,001)	3,790)	3,194)
Increase (decrease) in warranty liability⁴	(41)	(13)	7)	(23)	(28)	(15)
Increase (decrease) in severance liability⁵	(56)	334)	(35)	(58)	50)	(29)
Increase (decrease) in equity equivalents⁶	(1,336)	2,305)	1,723)	2,531)	(2,518)	1,801)
Interest expense	1,501)	1,222)	1,542)	2,389)	2,675)	2,488)
Interest expense, operating lease liability⁷	40)	31)	30)	77)	68)	74)
Adjusted interest expense	1,541)	1,253)	1,572)	2,466)	2,743)	2,562)
Tax benefit of interest expense⁸	(324)	(263)	(330)	(518)	(576)	(538)
Adjusted interest expense, after taxes⁹	1,217)	990)	1,242)	1,948)	2,167)	2,024)
Investment income, primarily interest	(305)	(100)	(42)	(54)	(160)	(313)
Investment income, before taxes	(305)	(100)	(42)	(54)	(160)	(313)
Tax expense (benefit) of investment income¹⁰	64)	21)	9)	11)	34)	66)
Investment income, after taxes¹¹	(241)	(79)	(33)	(43)	(126)	(247)
(Income) loss from discontinued operations, net of tax¹²	—)	—)	(765)	—)	—)	—)
Net income (loss) attributable to noncontrolling interest	(16)	(20)	144)	255)	913)	129)
Net operating profit after taxes (NOPAT)	2,835)	5,638)	7,874)	7,942)	5,052)	1,396)

Based on: 10-K (reporting date: 2024-02-02), 10-K (reporting date: 2023-02-03), 10-K (reporting date: 2022-01-28), 10-K (reporting date: 2021-01-29), 10-K (reporting date: 2020-01-31), 10-K (reporting date: 2019-02-01).

¹ Elimination of deferred tax expense. See details »

² Addition of increase (decrease) in allowance for expected credit losses.

³ Addition of increase (decrease) in deferred revenue.

⁴ Addition of increase (decrease) in warranty liability.

⁵ Addition of increase (decrease) in severance liability.

⁶ Addition of increase (decrease) in equity equivalents to net income (loss) attributable to Dell Technologies Inc..

⁷ 2024 Calculation
Interest expense on capitalized operating leases = Operating lease liability × Discount rate
= 829 × 4.79% = 40

⁸ 2024 Calculation
Tax benefit of interest expense = Adjusted interest expense × Statutory income tax rate
= 1,541 × 21.00% = 324

⁹ Addition of after taxes interest expense to net income (loss) attributable to Dell Technologies Inc..

¹⁰ 2024 Calculation
Tax expense (benefit) of investment income = Investment income, before tax × Statutory income tax rate
= 305 × 21.00% = 64

¹¹ Elimination of after taxes investment income.

¹² Elimination of discontinued operations.

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Item	Description	The company
NOPAT	Net operating profit after taxes is income from operations, but after removement of taxes calculated on cash basis that are relevant to operating income.	Dell Technologies Inc. NOPAT decreased from 2022 to 2023 and from 2023 to 2024.

Dell Technologies Inc., cash operating taxes calculation

US$ in millions

12 months ended:	Feb 2, 2024	Feb 3, 2023	Jan 28, 2022	Jan 29, 2021	Jan 31, 2020	Feb 1, 2019
Income tax expense (benefit)	692)	803)	981)	165)	(5,533)	(180)
Less: Deferred income tax expense (benefit)	(91)	(717)	(221)	(399)	(6,339)	(1,331)
Add: Tax savings from interest expense	324)	263)	330)	518)	576)	538)
Less: Tax imposed on investment income	64)	21)	9)	11)	34)	66)
Cash operating taxes	1,042)	1,762)	1,523)	1,071)	1,348)	1,623)

Based on: 10-K (reporting date: 2024-02-02), 10-K (reporting date: 2023-02-03), 10-K (reporting date: 2022-01-28), 10-K (reporting date: 2021-01-29), 10-K (reporting date: 2020-01-31), 10-K (reporting date: 2019-02-01).

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Item	Description	The company
Cash operating taxes	Cash operating taxes are estimated by adjusting income tax expense for changes in deferred taxes and tax benefit from the interest deduction.	Dell Technologies Inc. cash operating taxes increased from 2022 to 2023 but then decreased significantly from 2023 to 2024.

Dell Technologies Inc., invested capital calculation (financing approach)

US$ in millions

	Feb 2, 2024	Feb 3, 2023	Jan 28, 2022	Jan 29, 2021	Jan 31, 2020	Feb 1, 2019
Short-term debt	6,982)	6,573)	5,823)	6,362)	7,737)	4,320)
Long-term debt	19,012)	23,015)	21,131)	41,622)	44,319)	49,201)
Operating lease liability¹	829)	890)	1,007)	2,223)	1,792)	1,515)
Total reported debt & leases	26,823)	30,478)	27,961)	50,207)	53,848)	55,036)
Total Dell Technologies Inc. stockholders’ equity (deficit)	(2,404)	(3,122)	(1,685)	2,479)	(1,574)	(5,765)
Net deferred tax (assets) liabilities²	(1,432)	(1,360)	(643)	(5,428)	(4,938)	1,450)
Allowance for expected credit losses³	71)	78)	90)	104)	94)	85)
Deferred revenue⁴	29,145)	30,286)	27,573)	30,801)	27,800)	24,010)
Warranty liability⁵	426)	467)	480)	473)	496)	524)
Severance liability⁶	352)	408)	74)	138)	196)	146)
Equity equivalents⁷	28,562)	29,879)	27,574)	26,088)	23,648)	26,215)
Accumulated other comprehensive (income) loss, net of tax⁸	800)	1,001)	431)	314)	709)	467)
Non-controlling interests	95)	97)	105)	5,074)	4,729)	4,823)
Adjusted total Dell Technologies Inc. stockholders’ equity (deficit)	27,053)	27,855)	26,425)	33,955)	27,512)	25,740)
Marketable securities⁹	(311)	(351)	(398)	(634)	(12)	(334)
Invested capital	53,565)	57,982)	53,988)	83,528)	81,348)	80,442)

Based on: 10-K (reporting date: 2024-02-02), 10-K (reporting date: 2023-02-03), 10-K (reporting date: 2022-01-28), 10-K (reporting date: 2021-01-29), 10-K (reporting date: 2020-01-31), 10-K (reporting date: 2019-02-01).

¹ Addition of capitalized operating leases.

² Elimination of deferred taxes from assets and liabilities. See details »

³ Addition of allowance for doubtful accounts receivable.

⁴ Addition of deferred revenue.

⁵ Addition of warranty liability.

⁶ Addition of severance liability.

⁷ Addition of equity equivalents to total Dell Technologies Inc. stockholders’ equity (deficit).

⁸ Removal of accumulated other comprehensive income.

⁹ Subtraction of marketable securities.

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Item	Description	The company
Invested capital	Capital is an approximation of the economic book value of all cash invested in going-concern business activities.	Dell Technologies Inc. invested capital increased from 2022 to 2023 but then decreased significantly from 2023 to 2024.

Dell Technologies Inc., cost of capital calculations

Feb 2, 2024

	Capital (fair value)¹	Weights					Cost of capital
Equity²	80,658)	80,658)	÷	107,558)	=	0.75	0.75	×	12.94%	=	9.71%
Debt³	26,071)	26,071)	÷	107,558)	=	0.24	0.24	×	5.61% × (1 – 21.00%)	=	1.07%
Operating lease liability⁴	829)	829)	÷	107,558)	=	0.01	0.01	×	4.79% × (1 – 21.00%)	=	0.03%
Total:	107,558)					1.00					10.81%

Based on: 10-K (reporting date: 2024-02-02).

¹ US$ in millions

² Equity. See details »

³ Debt. See details »

⁴ Operating lease liability. See details »

Feb 3, 2023

	Capital (fair value)¹	Weights					Cost of capital
Equity²	29,146)	29,146)	÷	59,461)	=	0.49	0.49	×	12.94%	=	6.34%
Debt³	29,425)	29,425)	÷	59,461)	=	0.49	0.49	×	5.58% × (1 – 21.00%)	=	2.18%
Operating lease liability⁴	890)	890)	÷	59,461)	=	0.01	0.01	×	3.48% × (1 – 21.00%)	=	0.04%
Total:	59,461)					1.00					8.57%

Based on: 10-K (reporting date: 2023-02-03).

¹ US$ in millions

² Equity. See details »

³ Debt. See details »

⁴ Operating lease liability. See details »

Jan 28, 2022

	Capital (fair value)¹	Weights					Cost of capital
Equity²	40,689)	40,689)	÷	71,279)	=	0.57	0.57	×	12.94%	=	7.39%
Debt³	29,583)	29,583)	÷	71,279)	=	0.42	0.42	×	5.59% × (1 – 21.00%)	=	1.83%
Operating lease liability⁴	1,007)	1,007)	÷	71,279)	=	0.01	0.01	×	3.01% × (1 – 21.00%)	=	0.03%
Total:	71,279)					1.00					9.26%

Based on: 10-K (reporting date: 2022-01-28).

¹ US$ in millions

² Equity. See details »

³ Debt. See details »

⁴ Operating lease liability. See details »

Jan 29, 2021

	Capital (fair value)¹	Weights					Cost of capital
Equity²	67,870)	67,870)	÷	123,694)	=	0.55	0.55	×	12.94%	=	7.10%
Debt³	53,601)	53,601)	÷	123,694)	=	0.43	0.43	×	4.77% × (1 – 21.00%)	=	1.63%
Operating lease liability⁴	2,223)	2,223)	÷	123,694)	=	0.02	0.02	×	3.47% × (1 – 21.00%)	=	0.05%
Total:	123,694)					1.00					8.78%

Based on: 10-K (reporting date: 2021-01-29).

¹ US$ in millions

² Equity. See details »

³ Debt. See details »

⁴ Operating lease liability. See details »

Jan 31, 2020

	Capital (fair value)¹	Weights					Cost of capital
Equity²	28,655)	28,655)	÷	86,596)	=	0.33	0.33	×	12.94%	=	4.28%
Debt³	56,149)	56,149)	÷	86,596)	=	0.65	0.65	×	4.82% × (1 – 21.00%)	=	2.47%
Operating lease liability⁴	1,792)	1,792)	÷	86,596)	=	0.02	0.02	×	3.81% × (1 – 21.00%)	=	0.06%
Total:	86,596)					1.00					6.81%

Based on: 10-K (reporting date: 2020-01-31).

¹ US$ in millions

² Equity. See details »

³ Debt. See details »

⁴ Operating lease liability. See details »

Feb 1, 2019

	Capital (fair value)¹	Weights					Cost of capital
Equity²	42,170)	42,170)	÷	98,753)	=	0.43	0.43	×	12.94%	=	5.53%
Debt³	55,067)	55,067)	÷	98,753)	=	0.56	0.56	×	4.86% × (1 – 21.00%)	=	2.14%
Operating lease liability⁴	1,515)	1,515)	÷	98,753)	=	0.02	0.02	×	4.86% × (1 – 21.00%)	=	0.06%
Total:	98,753)					1.00					7.73%

Based on: 10-K (reporting date: 2019-02-01).

¹ US$ in millions

² Equity. See details »

³ Debt. See details »

⁴ Operating lease liability. See details »

Dell Technologies Inc., economic spread ratio calculation, comparison to benchmarks

	Feb 2, 2024	Feb 3, 2023	Jan 28, 2022	Jan 29, 2021	Jan 31, 2020	Feb 1, 2019
Selected Financial Data (US$ in millions)
Economic profit¹	(2,955)	670)	2,877)	604)	(492)	(4,820)
Invested capital²	53,565)	57,982)	53,988)	83,528)	81,348)	80,442)
Performance Ratio
Economic spread ratio³	-5.52%	1.16%	5.33%	0.72%	-0.60%	-5.99%
Benchmarks
Economic Spread Ratio, Competitors⁴
Apple Inc.	166.91%	140.08%	201.57%	197.91%	145.85%	89.93%
Arista Networks Inc.	—	27.57%	23.03%	38.02%	20.37%	25.87%
Cisco Systems Inc.	1.26%	8.49%	8.37%	7.62%	11.84%	6.06%
Super Micro Computer Inc.	—	9.24%	-0.31%	-7.84%	-10.65%	-5.56%

Based on: 10-K (reporting date: 2024-02-02), 10-K (reporting date: 2023-02-03), 10-K (reporting date: 2022-01-28), 10-K (reporting date: 2021-01-29), 10-K (reporting date: 2020-01-31), 10-K (reporting date: 2019-02-01).

¹ Economic profit. See details »

² Invested capital. See details »

³ 2024 Calculation
Economic spread ratio = 100 × Economic profit ÷ Invested capital
= 100 × -2,955 ÷ 53,565 = -5.52%

⁴ Click competitor name to see calculations.

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Performance ratio	Description	The company
Economic spread ratio	The ratio of economic profit to invested capital, also equal to the difference between return on invested capital (ROIC) and cost of capital.	Dell Technologies Inc. economic spread ratio deteriorated from 2022 to 2023 and from 2023 to 2024.

Dell Technologies Inc., economic profit margin calculation, comparison to benchmarks

	Feb 2, 2024	Feb 3, 2023	Jan 28, 2022	Jan 29, 2021	Jan 31, 2020	Feb 1, 2019
Selected Financial Data (US$ in millions)
Economic profit¹	(2,955)	670)	2,877)	604)	(492)	(4,820)

Net revenue	88,425)	102,301)	101,197)	94,224)	92,154)	90,621)
Add: Increase (decrease) in deferred revenue	(1,141)	2,713)	1,981)	3,001)	3,790)	3,194)
Adjusted net revenue	87,284)	105,014)	103,178)	97,225)	95,944)	93,815)
Performance Ratio
Economic profit margin²	-3.39%	0.64%	2.79%	0.62%	-0.51%	-5.14%
Benchmarks
Economic Profit Margin, Competitors³
Apple Inc.	21.33%	22.03%	23.82%	22.99%	19.11%	17.56%
Arista Networks Inc.	—	20.86%	15.90%	22.33%	15.92%	19.03%
Cisco Systems Inc.	2.04%	8.44%	9.39%	8.50%	12.36%	6.39%
Super Micro Computer Inc.	—	3.13%	-0.13%	-2.83%	-3.95%	-1.80%

Based on: 10-K (reporting date: 2024-02-02), 10-K (reporting date: 2023-02-03), 10-K (reporting date: 2022-01-28), 10-K (reporting date: 2021-01-29), 10-K (reporting date: 2020-01-31), 10-K (reporting date: 2019-02-01).

¹ Economic profit. See details »

² 2024 Calculation
Economic profit margin = 100 × Economic profit ÷ Adjusted net revenue
= 100 × -2,955 ÷ 87,284 = -3.39%

³ Click competitor name to see calculations.

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Performance ratio	Description	The company
Economic profit margin	The ratio of economic profit to sales. It is the company profit margin covering income efficiency and asset management. Economic profit margin is not biased in favor of capital-intensive business models, because any added capital is a cost to the economic profit margin.	Dell Technologies Inc. economic profit margin deteriorated from 2022 to 2023 and from 2023 to 2024.

Dell Technologies Inc. (NYSE:DELL)

Economic Value Added (EVA)

Economic Profit

Net Operating Profit after Taxes (NOPAT)

Cash Operating Taxes

Invested Capital

Cost of Capital

Economic Spread Ratio

Economic Profit Margin